New legislative amendments in Uzbekistan
According to Law ZRU#-785 “On introduction of amendments and additions to several legislative acts of the Republic of Uzbekistan related to improvement of tax and custom legislation” dated 27 July 2022, certain amendments and clarifications were made in the Tax Code of Uzbekistan.
The aim of this alert is to provide brief review of the most important amendments. However, it is recommended to get familiarized with the text of respective legislative acts, in order to understand the new rules fully.
Excise tax
- Mobile service providers pay excise tax at the rate of 10% (previously was 15%) (effective from 1 January 2022).
Personal income tax
- Personal income tax rate is set 12% on the income of non-resident individuals (previously 20%). At the same time, the personal income tax rates for non-residents individuals on income in the form of dividends and interest, as well as income from freight, have not been changed. (effective from 1 May 2022).
Property tax
- Taxpayers obtained the right to make an independent valuation of immovable property if the value of 1 m2 of the property is less than the minimum value established by the Tax Code. At the same time, the results of an independent valuation, including those conducted by the taxpayer in the previous two years, will be recognized as taxable base (effective from 1 January 2022).
- antenna-mast metal structures located in rural areas (with the exception of cities and district centers) including installed structures and its integral parts are exempt from property tax on (effective from 1 April 2022).
Land tax
- antenna-mast metal structures located in rural areas (with the exception of cities and district centers), as well as installed structures and integral part of them are exempt from land tax (effective from 1 April 2022).
Temporary tax exemptions
- From 1 April 2022 to 1 January 2025, social tax at the rate of 1% is applied to entities providing services in the field of retail trade and catering, hotel services (accommodation facilities), passenger and cargo transportation by road vehicles, repair and maintenance of vehicles, computer services, repair of household appliances, agro and veterinary services, as well as services provided in entertainment centers, if based on the results of the current tax reporting period, revenue from provision of such services for the established types of activities is at least 60% of the total revenue.
- From 1 January 2022 to 1 January 2027, entities having trade complex with an area of more than 5 thousand m2 and hotels (accommodation facilities), including land plots occupied by them (effective from January 1, 2022) are entitled to:
- apply a coefficient of 0.1 to the tax rates on the property tax of legal entities and land tax on legal entities. This incentive is applied for 5 years from the month of commissioning of immovable property, newly built before January 1, 2027, and land plots occupied by these properties.
- deduct the cost of such buildings for corporate income tax purposes within 2 years as depreciation.
- From 1 April 2022 to 1 January 2025, entities registered in the established tourist zones of the districts and cities specified by the decisions of the President of the Republic of Uzbekistan, and providing catering, hotel (accommodation facilities), shopping, entertainment, tour operator and travel agency services in these territories, pay:
- Revenue based tax at the rate of 1%
- Property tax on legal entities and land tax at the rate of 1% of the accrued amount of these taxes
(applicable to objects arising from 1 April 2022)
- From 1 April 2022 to 31 December 2024:
- income of individuals – residents and non-residents of the Republic of Uzbekistan in the form of dividends on shares are exempt from personal income tax (previously 5%).
- income of legal entities – in the form of dividends on shares is subject to 5% dividend tax (previously 10%)
- income of individuals and legal entities – residents and non-residents of the Republic of Uzbekistan in the form of interest on bonds of entities is exempt from personal income tax and corporate income tax
- From 1 April 2022 to 1 January 2025, the import of spare parts of medical equipment and products, as well as consumables for medical purposes into the territory of the Republic of Uzbekistan according to the formed lists is exempt from VAT. (effective from April 1, 2022)